MediaNews expected to run Breeze

Times Staff Writer

William Dean Singleton's Los Angeles-area interests will expand again next week if the Denver-based newspaper baron completes an expected deal to operate the Torrance-based Daily Breeze.

A San Francisco court action remains an indirect impediment, but Singleton's MediaNews Group is expected to win control of the paper and add it to local holdings that include the Pasadena Star-News, the Long Beach Press-Telegram and the Daily News in the San Fernando Valley.

The privately held company would acquire the 112-year-old Daily Breeze from San Diego-based Copley Press Inc. in a two-step transaction, which would give initial ownership of the 65,750-circulation paper to Hearst Corp.

New York-based Hearst is expected to purchase the paper -- for $25 million, according to the San Jose Mercury News -- and turn over its operation to MediaNews. The deal is similar to their arrangements in Monterey County and St. Paul, Minn.

In the second step of the transaction, Singleton's company eventually would take ownership of the Breeze and the two other papers. Hearst's $300-million investment would be converted into a 30% stake in MediaNews' holdings outside of the San Francisco Bay Area.

The deal would allow Singleton to continue to cluster papers geographically and combine editorial, printing and distribution operations.

MediaNews followed the same strategy this year in buying the San Jose Mercury News and the Contra Costa Times from McClatchy Co., giving Singleton 11 daily papers and market dominance in the Bay Area.

The Hearst-MediaNews partnership has not been without controversy because of Hearst's ownership of the San Francisco Chronicle. San Francisco real estate magnate Clinton Reilly filed an antitrust lawsuit in July in an attempt to block what he said was an anti-competitive collaboration between the San Francisco daily and Singleton's chain.

U.S. District Judge Susan Illston initially refused to block the deal but last month granted a temporary restraining order that limited the companies' interactions. She acted after a letter surfaced that suggested the companies would try to consolidate advertising and circulation operations.

Hearst's lawyers filed papers this week in an attempt to show the judge that they were not concealing anything about their relationship. Those documents disclosed the pending Daily Breeze deal.

Illston is scheduled to consider the matter again Tuesday. Hearst and MediaNews hope the action will be lifted, removing any cloud over the Breeze sale.

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